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Squawk on the Street

News/Business. Melissa Lee, Carl Quintanilla, David Faber. Opening bell market action. New.

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03:00:00

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San Francisco, CA, USA

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Virtual Ch. 58 (CNBC)

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mpeg2video

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ac3

PIXEL WIDTH
528

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480

TOPIC FREQUENCY

Sandy 50, Us 46, Manhattan 29, New York 26, New York City 15, Pennsylvania 15, U.s. 14, New Jersey 14, Costco 12, Carl 12, Fema 10, Delta 7, Cuomo 7, Philadelphia 6, Jim Cramer 6, Schwab 6, Brooklyn 5, Florida 5, Jim Sinegal 5, Irene 5,
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  CNBC    Squawk on the Street    News/Business. Melissa Lee, Carl Quintanilla,  
   David Faber. Opening bell market action. New.  

    October 29, 2012
    9:00 - 12:00pm EDT  

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trading until 9:15. only about 15 more minutes is left on this trade. we're not sure when they will open again. >> hit it, andrew. >> gjoin us tomorrow. hope to be here. "squawk on the street" begins right now. >> the threat of hurricane sandy has the east coast and wall street on edge. welcome to str"squawk on the street." we're live this time at cnbc global headquarters. we're here because nyc and nasdaq will be completely shut down today because of sandy. no stock trading as well. originally they planned to use the electronic platform to continue nonfloor trading today but now decided to stop trading all together. the first related shutdown due to weather since hurricane gloria in 1985. trading will be suspended in 15
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minutes. all other markets will remain open with scheduled break between 5:15 p.m. and 6:15 eastern time. we see red arrows in europe. we'll talk about things driving that action later on. >> we have your bases covered on hurricane sandy and what is at stake for businesses and your family. we begin with scott cohn in battery park. scott? >> reporter: good morning, melissa. this was completely dry just a couple hours ago. what you are looking at here is high tide. this isn't storm surge to speak of yet. it is high tide exacerbated by the full moon and somewhat exacerbated by sandy. if you fast forward about 12 hours from now when the next high tide comes in and the storm is coming ashore, add about a
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foot of water onto this and then you start to look at what manhattan is facing. it's not that much drier inland from here in this so-called zone a where 375,000 people live. some very important businesses and financial capital of the world is located which is why they are not trading stocks today. it will not be safe to move around as the day wears on. again, just to orient you, we're at the lower tip of manhattan out there is lady liberty. the waters are looking very angry. we have not had a lot of effects of the storm yet because it's still a couple hundred miles further down the east coast. and so this is just a sense of what kind of water that we're looking at. the water the main issue as the storm comes in and pushes water into new york harbor into long island sound and creates these issues. add to that the wind. add to that potential power
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outages and that's what you are looking at. you heard it is the first weather related closure for a full day at the new york stock exchange since 1985. if they close again tomorrow, which is currently the plan, it's the first two-day weather related closure of nyse since 1988. >> we know it will affect tens of millions of people. your live shot so far is quickly turning into the talk of the morning as we continue to watch what's happening in lower manhattan. scott cohn in battery park city. thanks. we're displaced and what we're seeing in scott's shot is a big reason for it. >> it makes a lot of sense for everyone to clear out because -- don't need me to tell you which way the wind blows but it's clear that it makes sense to close. i remember in 1985. i had gone to goldman that morning. young guy working at goldman. we thought the stock market was going to open. looked like it would open. there was trading and next thing you know i was playing cards.
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>> the question is if you were just to close the physical trading floor but keep electronic trading open, how robust would volumes be and how wimpy would markets be and disservice to investors if you maintain that market open. >> there's a big emphasis on market stability right now and of course on liquidity and volatility as well. there was a real issue out there that with not much participants in the market with main trading floor closed, people having trouble getting in and then people having trouble getting out, what's the risk/reward ratio and risk got higher as people were unable to get in. let's bring in duncan on the phone with us now. are you there? >> i'm here. >> thank you, duncan. thanks for joining us. the important thing is could you walk us through the decision making process here as you heard there was a decision made yesterday to close the nyse floor and keep electronic
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trading open and then later in the evening there was decision by everybody to close all of the exchanges. can you sort of give us a little on the back story there? >> sure. good morning. i encourage you all to stay safe and i think this was the right decision we made. let me just walk you through what happened yesterday. as i talked to you yesterday, bob, earlier in the day we made the call to close the building but open markets electronically using a contingency plan. i think it became clear to us quickly after making that decision that there was an overwhelming consensus from the majority of participants that they would prefer that the markets be closed entirely as you hinted at the stability and volatility issues but the key point from our point of view was electronic or not, the firms are all going to have to staff themselves and therefore endanger their people. so i think the consensus was around safety concerns first and foremost giving escalating evacuation messages and a
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concern that if firms would interact with our contingency tech nol for the first time in production, probably not a great idea either given how hard it would be to mobilize staff over the weekend. we coordinated with other exchanges and late last night made the right call in shutting the markets entirely. >> this is electronic trading. it's not robotic trading. there are thousands of people on trading desks at morgan stanley, merrill lynch, goldman sachs, who have to come in and be part of the market as well and those people had real problems getting in. that was the main decision, correct? >> it's easy for us to say we can operate remotely from chicago or somewhere in a data center, that isn't respectful of everyone else's needs in the marketplace because they would have to staff and put people in harm's way. i think the spirit that everybody approached it with last night led to the right
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decision albeit later in the day than we all probably would have likeded ed td to have made it. i have calls with the industry participants again starting after i hang up with you guys. i think we'll announce our intentions for tomorrow a lot earlier today probably shortly after noon would be our goal. in weather reports are accurate, i'll agree with mr. cramer, none of us is a meteorologist, it's hard to imagine we'll be open tomorrow if these reports are even close to correct. >> duncan, i'm curious, if one would go down to the new york stock exchange right now, what sorts of preparations have the exchange made to protect against physical damage and are you concerned about physical damage with servers located in new jersey. >> i think the data center is secure. it's not in a flood zone. it's a fortified building. we're not worried about that. we're keeping a close eye on it. in terms of lower manhattan, we have taken precautions that others have in the flood zone. the building is obviously not --
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it's right on the edge of zone a and we're not too worried about it given what it would take to breach the building there. we do have a security team there this morning. a couple of us are probably going to be in there today. larry is in the city. he'll walk over to the exchange later morning just to do a site check. i think we're also going to work hard in the next 24 hours because we do as an industry have our eye on wednesday given that it is monday end. worst case scenario we hope we hope we would open on wednesday. >> this is a competitive marketplace. you have a war between nasdaq and you. was there anybody sunday night who just decided this is our chance to be able to show customers that we do not really exist as a physical presence. we can get it on and basically trump the other exchange because
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it doesn't seem like there's love and peace talk between you guys. >> i'm happy to report while everything you said is correct, there's not a lot of love and peace talk, everybody arises above it in a situation like this, jim. i'm happy to report there was not any indication of any calls last night that people were thinking about their own pnl or business model. trying to make a decision that was right for all of the market participants. we ended up doing that. my bias is to keep markets open but this is a pretty easy decision from our point of view in the end. it's not worth putting people in danger. it's no time to be a hero. it's silly. >> what happened where initially there was a take it would open? when we were at goldman in 1985, the issue is there's no internet or real connection. we didn't have these things. we have internet and people who say we don't even need new york city anymore. how about the out of town guys who thought this was a great
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chance to trump new york? >> again, we got none of that from the other venues that are located outside of manhattan. there was no talk about them staying open. it goes back to what bob said. if a couple of the major markets are closed, i think you're doing everyone else a disservice if just a few thinly traded venues which would even are more thinly traded. people involved aren't involved and i think you are just asking for more instability and more volatility and i am happy to report that no one was signing up for that. what i underestimated was when we made the first call yesterday which was entirely my decision, i think i was underestimating how much people would have to staff to participate if we were operating electronically. when it became clear to us they did not want to send a lot of their people into harm's way, then i think we quickly reversed field and as i said communicated as quickly as we could last
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night albeit later than i would have liked. >> duncan, it's bob again. there are two parts to this. the first is i would have liked to see what happened when you initiated the contingency plan because i like to see what happens when you let them scale up here and of course the assumption being they are robust enough to handle volume that would normally go to the new york stock exchange. are you confident of that number one? number two, what do you say to critics who say this is an indication that of course electronic trading has fully come into its own even if the nyse wants to do it and what is the commitment to nyse of keeping the floor and having floor trading. >> i don't think this was about that, bob. you have a contingency plan as you said. the last time we had to implement one of these for weather related outage was more than a quarter century ago. if we have to do something like this and instead of replicating the floor environment trying to figure out where to move people to, we opt to do it
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electronically for a day or two doesn't make a statement or change my view about how we feel about the floor. you know how i feel about it. it's an important point of the model. in an emergency situation, do you what you need to do to keep the markets open. in terms of that, there is no doubt it could handle volume. until you test it in production, you're not going to know. so that was going to be the first production test to see and our guess is it would have gone fine. who knows. you also would not have been likely to see the volume and volatility you would have seen as a lot of people simply weren't going to participate today if we had tried to open as an industry. >> have you started to give thought -- one thing about flooding, you never really know what the extent of the damage is going to be. what if we go into wednesday? what if people start missing out on their last chances to unload options? >> we are thinking that far ahead as an industry and although we can't predict the weather, carl, i think it's really, really, really important for the industry that we find a
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way to get open on wednesday given everything you just said. it's month end. it's options expiration. there's no doubt that we need to figure out a way to get open on wednesday. almost regardless of what the damage is. let's take that one day at a time. i'm happy to stay if close touch with you guys. we'll be making a decision as an industry this afternoon. i'm sure i or someone will report that to you guys. and then one of us can get on the phone with you tomorrow morning at the same time if you would like to give people an update. >> that sounds like you say keep your hotel room tonight. >> i think that's a good idea. for tonight and tomorrow night too if you can. >> appreciate your time this morning. >> be safe. >> you too. thanks for bringing it to us. the key take aways are good chance closed tomorrow. wednesday come hell or high water they're going to do their best to open up. >> this was the right decision.
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we're all electronic they should open, it's not. it's people that are thousands of people that are stranded. >> how about the no macho man thing. i was looking for macho. post office attitude. didn't go for that. >> is post office open today? >> i don't know. do i look like a post office guy? >> a quick question when it comes to trading of u.s. stocks overseas, does that happen if u.s. markets are closed? >> i don't see why not. i wouldn't think that would stop that. there are u.s. stocks listed on overseas. >> trading down in germany. someone didn't sell something over the weekend. >> my favorite is how everyone talks about it being an illiquid day when we are about to get pounded by liquid. >> we'll get more on hurricane sandy including a live interview
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with the ceo of expedia. travelers aren't the only ones keeping an eye on the hurricane. the latest on what's at strike for energy, refineries and gas prices. one more look at equity index futures which just closed at this very second. you have made your bets. back in a moment. don't go away. a short word that's a tall order. up your game. up the ante. and if you stumble, you get back up. up isn't easy, and we ought to know. we're in the business of up. everyday delta flies a quarter of million people while investing billions improving everything from booking to baggage claim. we're raising the bar on flying and tomorrow we will up it yet again.
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new jersey under a state of emergency ahead of hurricane sandy's arrival. kayla tausche, what's the scene? >> reporter: the waves are getting huge out here. we saw -- we heard 26 feet was the size of the waves about 20 miles off the coast here as the storm is strengthening, it looks like there's no way it will miss the jersey shore. looks like atlantic city is right in the middle of that eye. what you're seeing is storm surge right now starting to top four feet expected to reach a maximum of eight feet. to give you a sense of relatively, here we are at 14 feet above sea level. just a few feet separating where that storm surge is expected to go. now, if this does make landfall on the jersey shore as it is expected to, it would be very rare occurrence. only three storms have ever touched down and made their
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first landfall in new jersey. two unnamed storms in 1878 and 1903 and then hurricane irene became a tropical storm when it hit just last year. now, hurricane irene caused roughly $15 billion in damage all across the northeast. the state of new jersey alone got $275 million in federal assistance most going to homeowners and flooding private insurers. here in cape may, commercial fishing is the big business. a billion dollars in revenue for new jersey. further up atlantic city of course we know all of those casinos, 12 flagship institutions across the boardwalk are closed and halloween parties canceled. atlantic city is lower lying. that will be a very, very big hit. the place to watch. evacuated yesterday by 4:00 p.m. and chris christie declaring a state of emergency there because of how bad conditions are supposed to get there. it's only 9:00 a.m. right now. you can see how bad it's
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getting. the waves are spilling up into the dunes and there is flooding in the street. there's structural damage just a couple blocks away that we'll check out. definitely a strengthening storm here on the shore of new jersey. carl? >> kayla, thank you. we'll come back to you a lot today. kayla tausche in cape may. 60 million people affected by this. it's a sixth of the country. >> i want to say that i am not the reason why kayla is down there in harm's way. it is not my fault. >> no one would want to be held responsible for that. >> somehow i'm her father. it's not my daughter. she's not down there. could you check my house in ocean grove where i have already written it off if you're down there. >> reporter: send me the address, jim. i'll walk over there and see how it looks. we're here. we might as well, right. >> i never felt it was such bad idea to have a house that was -- all my life i wanted a house on the beach. great. i got it on the beach. >> reporter: it's completely
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empty but cape may for those who have been here has this very creepy font. i actually tweeted a picture of one of the street signs yesterday. it's like a haunted house font. you have an empty town, you have a hurricane, you have halloween. it really is the perfect storm here it feels like. >> don't be scared. >> thanks a lot, kayla. the "times" has a big piece about how people after irene which turned out to be nothing are taking this in sort of a relaxed attitude. >> storms of the century every year it seems which can lead to complacency. you continue to hear that. there it is. >> very few people learned the lesson from irene in terms of what occurred. i live in summit. we were hit badly.
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some fatalities. i come back and shocked to see the same level of preparation there was last year which is not a lot. >> you never know. let's not forget last year upstate new york actually bore the brunt with massive flooding in vermont. those towns that are still frankly digging out and trying to restore what was badly damaged there. we simply have no idea. >> that's not including the snow expected to come on top of it. two feet in some parts of the appalachian mountains. >> my daughter is in new orleans. she works for habitat for humanity. they are still building homes in ward 5 for areas that have been trashed. she caulks. >> did you give her caulking skills? >> no one can caulk like i do. i do hold the gun the wrong way and caulked my face. the damage just doesn't seem to go away. here's an interesting statistic.
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from the deckers conference call last week, maker of uggs, the warmer year on record since record keeping began in the 1880s. those in denial -- i know, david, you have often questioned global warming. >> right now i'm channeling it out of the chair. >> what is that like? >> you don't want to know. >> is the tea party alive and well? >> i think we should stop now. he may still be in the building. >> he's in the building. be careful. we've had a lot of unusual weather events. it will raise those questions and something that's not discussed at all. many people pointed out on the campaign trail. >> catastrophic bond market is robust. many did not lay off hurricane risk. i talked to business who did that business and they're surprised there aren't more
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insurance companies taking advantage of that market. >> we'll talk about stock impact of the storm as well. there is trading today. though not in the united states. we'll take you live to europe for all of the movers overseas and what they could mean when the u.s. markets reopen whenever that may be. we'll follow hurricane sandy's path for you. thousands of flights being canceled because of this storm. we have an exclusive interview with ceo of expedia. a special "squawk on the street" live from cnbc headquarters continues right after this.
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u.s. markets closed because
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of hurricane sandy. kelly evans is in london with the latest. >> melissa, hi. it's being described by some as storms on both side of the atlantic. ubs up 6.5% before financial times reported it may layoff up to 10,000 people and wind down its fixed income business. when that's the outperformer, not necessarily the best of days and also we have decliners outpacing advancers by 7-3 ratio. we have seen stocks make a comeback over the last 60 minutes or so. we could take a look at the sectors for a sense of where the leaders are. we are seeing perhaps four sectors in the green. tech, benefverages, real estate added. we can zero in on insurance market for a second and give you a felt of where the pain is being felt. reinsurers are taking this one on the chin. if you look at some of the other
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major insurers across europe, we see the same thing. smaller losses but still in the red. they have been losing money. if you are an insurer, we know investments in this low rate environment have gone nowhere. underwriting is getting more difficult as well. look at the major indexes across europe. all in the red. ftse 100 down half a percent. one of the underperformers, pearson. you have mentioned this story. a lot of funny headlines coming out of that. the name of the come is penguin random house. shares down half a percent on that news. a look at the bond space before handing it back to you. you can see rotation into quality this morning. ten-year boons benefiting.
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4.993% is the number to watch. eyes on bank of japan. the view being expressed on this side of the pond isn't much rosier than the attitude there as sandy bears down. back to you guys. >> thank you so much. talk to you later. kelly evans in london for us. we're following sandy's path and impact it could have on your money. this is going to matter when the storm is over on wednesday. the business world moves on. we'll bring you details and talk to the ceo of the weather company. thousands of flights being canceled. last-minute hotel rooms being booked. a live and exclusive interview with the ceo of expedia next on "squawk on the street."
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scuba diving the great barrier reef with sharks, or jumping into the market, he goes with people he trusts, which is why he trades with a company that doesn't nickel and dime him with hidden fees. so he can worry about other things, like what the market is doing and being ready, no matter what happens, which isn't rocket science. it's just common sense, from td ameritrade. normally around this time we would talk about the opening bell doing stock chat. the markets are closed. i made a quick list this morning of broad sectors off the top of
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my head. travel, banks, exchanges, retailers, restaurants, insurers, and utilities. >> i tell you what will happen which is part and parcel with 2012. the quarters will be reported and everyone will use this as an excuse of why things are not so great. refining company lose as couple days. the supermarkets, we have numbers there. clearly when you went to the supermarket this weekend they were selling stock that would probably otherwise be there forever so you can restock. kroger up nicely last week in anticipation of a big rush this weekend. >> look at this note from citi. the note put out on friday detailing exposure that retailers have. most exposure to the east coast where the hurricane is going to hit. super value up 34% of stores in the northeast. you mention drugstore chain or
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supermarket is where people might go to stock up for preparations. you take a name like macy's. 29% exposure to the northeast. are you going to go and buy a down coat in a storm? probably not. you'll delay those purchases. what happens to those purchases? taking a look at the exposure geographically is an interesting swipe at this retail story. >> people have tried to play these things with home depot and lowe's over the years. it doesn't work. that worked before there was the internet and when there was a group of people who would get the paper the next day and see i should buy home depot and people had already bought heome depot. people said shouldn't we buy home depot as soon as the market opens? there are people who might have bought it last week that can sell it. the market is not as dumb as it used to be. >> does it make it more
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difficult when we get companies citing sandy as a shortfall from here and there to discern who had a good quarter and who didn't? >> i saw companies saying that there were two jewish holidays in the month of september. that's why they didn't do the number. hello. there's the internet. people have used every excuse in the book. they cited the fact people weren't buying as many hunting shoes. >> shoes specifically. >> perhaps september was warmer. come on. maybe people aren't buying as much as they did. i can't make an excuse for everything. >> paul walsh joining us talking weather analytics said we knew the storm was coming for a week. it gives retail sales a boost for the month. >> that's a good point. >> this was the most widely telegraphed frankenstorm hearing
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about it monday of last week. i was at a walmart yesterday doing checking. i think they are buying things. here's one. i'll give you one. a huge amount of business trying to get the company to be more outdoor. coleman lanterns. someone will say they probably sold a lot of coleman lanterns. they sell toasters and they dvi. many are not a one-trick pony. when you say i want to buy vf corps because they have northface jackets, things are not as simple as they used to be. there's not a pure play. not an umbrella play. >> at this time normally if the
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stock markets were open, we would talk about earnings. we're still in earning season. companies postponed the earnings released from this morning to later on in the week because of the storm. we're talking about names like pfizer and those have all postponed earnings releases because of hurricane sandy. watch for those later on this week. just something to keep in mind as we go into trading. >> the week is going to be consequenti consequential. a jobs number on friday. the last one before presidential elections. a week from tomorrow. we're going to get through this period of uncertainty given the storm. there's a lot in front of us. it's not just about weather. >> q-4 revenue below consensus from companies that make donkeys that go up and down. a weak quarter domestically. not really able to buck that. a lot of people feel that they could be in play. armstrong world disappointing quarter. that's a surprise.
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a lot of people would like a housing play. there's a lot to that company. and then burger king. which comes out and burger king some people would say before currency they had good numbers. systemwide sales at 3.9%. mcdonald's is weak. we would love to dive deeper into that quarter. >> burger king and red robin managed to get quarters out. >> i have not eaten at a red robin. >> shocked to hear that. really. they brought stuff to the set here many times. >> it's my bad. i had them bring the truck here to try it. shortly i recommended stock and bingo. takeover bid. >> burger king is an interesting story. let's not forget recently moved as a public listing. martin franklin was involved in that. he's involved in one of the largest shareholders and controlling the company to large extent. interesting to watch. positive comps but not
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enormously positive. it is a turnaround. >> other than panera, we did not see a really good number in the quick serve quality serve. a lot of people asking me on twitter, is chipotle at the right level? i would say this. it was at the wrong level at 450. this stock has come down tremendously. it has the same multiple as panera but panera's growth rate is 6 to 7 and chipotle came in around 4. >> interesting. moving onto energy, hurricane concerns affected pricing in the futures market. where do we stand in terms of trading? >> cme traded stocks futures electronically this morning but they stopped at 9:15 closing for the rest of the day. the nimax announced closures today but other electronic futures and options markets will remain open including energy, metals and gas. as far as reaction in the energy space to hurricane sandy, with
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he see those mixed. wti is slightly lower while we have seen brent trading higher this morning. we're also seeing some upward momentum in natural gas, heating oil and nat gas seeing the biggest move. supply concerns an issue from the storm. also, a cold front on the back of this storm and that's concerning traders as well. that could spike demand quickly. heating oil and gas moving higher as reduced refining capacity will tighten supplies. the shutdowns mean refineries can't take delivery of crude and they won't need it if they're not operating. keep in mind that 6.5% of the nation's oil refining capacity is located in the path of this storm. phillips 66 which handles 238,000 barrels per its refinery in linden, new jersey, reducing rates at its new jersey refinery as is philadelphia energy and so far delta air
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lines saying that its jet fuel refinery in pennsylvania is well prepared for the storm but we'll see. long refinery shutdowns depend on power outages and flooding. as the storm worsens today, that's what we'll need to watch for. guys? >> thank you very much. thousands of travelers are stranded because of hurricane sa sandy. we have the former ceo of continental airlines to talk about the impact on the industry and the man who led fema during hurricane katrina will tell us what the federal emergency agency should expect from this storm.
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>> we talked about the travel impact of sandy as it makes its way across the mid-atlantic and eastern seaboard. 7,400 airline flights canceled.
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schools in nine states we talked about that. in terms of travel, we'll talk expedia later on, generally not good. you have planes out of position for when things eventually do get better and with the storm, the winter storm that will hit later on, recovery may take longer. >> the only people who are really traveling and you'll see them on the highway are big convoys of trucks that do electric from other states particularly from florida and georgia. i know this because georgia power took over my hotel already. that's who comes up and visits. we welcome them with open arms. please let them do work. last time they weren't allowed to touch things because of union issues. i hope that's not the case this time. >> we talked about stocks before. i know it's odd to talk stocks on a day when markets are not open. there's been a deal this morning to talk about clean harbor buying safety kleen. business goes on. deals happen. this is a waste management business. all cash transaction here.
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one to watch when the markets do open whenever that is later on this week. >> interesting deal. i've had clean harbor on the show every time they report. they moved aggressively into taking care of man camps. we'll find out what it's like tonight -- man and woman camp. they moved in when you've had so much development and housing hasn't caught up with them. they started with the idea of cleaning up spills. the safety kleen is a new business for them. this is cleaning up commercial enterprises. i found the first question to ask is are they running out of room in their other business or is this just a whole new line that they feel like they have an opportunity to capitalize on notion of cleaning up whatever is a mess whether it be some sort of spill in a small business, got to find out more about this. >> all right. joining us on cnbc newsline
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talking travel, former chairman and ceo of continental airlines and cnbc contributor. gord gordon, good morning, are you in houston today? >> i'm and glad to be here, carl. >> we have a large storm here, gordon. biggest storm ever recorded in the atlantic, 2,000 miles of clouds, it's going to linger and take that hard right turn once it makes landfall. any special challenges for the carriers this time? >> the challenge is to service debt without revenue because canceled flights don't do revenue but the debt continues. what they canceled all inbound to east coast destinations last night so airplanes won't be trapped. passengers can't get to the airport in any case with bridges and trains not running. it's going to be a lull in the revenue generation. maybe a three-day lull which will be difficult. >> i read this morning that towers normally shut down when winds are 60 to 70 miles an hour
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but having the mayor shut down the subway train, that changed everything, didn't it? >> worker can't get to the trains to get to work. it guarantees a shutdown. >> jim cramer here. good to talk to you again. i went to work today. it was quite nice actually. there was no traffic. weather was fine. i'm wondering whether there are a group of people that say what the heck. storm was supposed to start yesterday at 4:30 and then to start at 7:00 and then 3:00 a.m. this morning things are good. is there anybody that says, you know what? why didn't they give us a chance to get in? >> what happens is they get chr criticized for being wrong but not praised for being right. they take the conservative view and that precludes any disasters and that's a role of government.
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overreaction is more typical and you see that this morning. you're at work and i know where in new jersey you are and you have to cross george washington to get there. >> gordon, there must be some group of people who feel -- i think katrina was the dividing line. things changed. there used to be people who wanted to press this. take advantage of it. it seems like that is universally ruled as being reckless and indangendangerment. that wasn't the case before katrina. >> that's cya. public officials don't be a bonus for being right but they get criticized for being wrong. since katrina, you're right, everyone is taking conservative. hard to argue with that because when they are correct, it was the correct thing to do. as you see, you get to work and a lot of people can't get to work even if they wanted to. >> gordon, it's david faber. let's assume this goes through
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tomorrow and wednesday we start to see a break. how quickly can things get back to normal for the airline industry in this country? >> david, they have sophisticated software that knows what pilot time and airplane time and all of the constraints of getting back together. from my own experience, i would say 24 hours you can be up and running and back on track. it's happened before with a big snowstorm especially in the northeast. unprepared smaller airlines sometimes have more troubles. you recall jetblue took days. that's behind them. they have software that puts them back in quickly. >> gordon, laguardia is four feet above high tide. is there any potential liability? do planes actually get damaged in this kind of thing? >> obviously they would and could because the wind forces them and moves services around so they've evacuated airplanes from laguardia. they are probably in an airplane that's not in an hangar safely anywhere there because they are susceptible to high gust winds.
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the winds spin the airplane around and wreck it. so four feet off high tide in laguardia if there's a big surge, there could be damage on the runways. >> mta is worried about corrosive sea water. i imagine you have to be if you run a fleet of jet engine planes as well. i don't have to tell you to stay dry. appreciate you coming into the fun. we'll talk to you soon. >> bye-bye. >> gordon joining us from houston. hurricane sandy barreling up the east coast. we have someone that knows a thing or two about extreme weather. the ceo of the weather company is up next and ceo of expedia. thousands of people changing plans because of sandy. how could it impact the bottom line? we'll be right back. tdd#: 1-800-345-2550 this morning, i'm going to trade in hong kong.
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we continue it monitor the movements of hurricane sandy.
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david, good morning. good to have you. >> good to be with you this morning. >> obviously we know this is a time to get eyeballs and there's a couple different things happening this time around involving youtube for instance. do you want to talk about that? >> our goal right now is to make sure that every business and every person has the information they need. we're doing that in a variety of ways. certainly youtube is live streaming us. we've also got our own weather.com and weather underground up and running and of course the weather channel and our business working closely with airlines, energy traders and local media outlets. we're getting the news out in lots of different ways. >> what kind of engagement is youtube drawing? >> it's early. a million folks so far. we've only been up 14 hours. it's ramping up. it's an important channel. >> what kind of an opportunity is the storm like this in terms of migrating the person who is just checking in to see what the latest on sandy is and to a
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viewer or person who regularly checks your website? >> i think what our properties are known for is the most accurate forecast, the most understandable and the most useful in terms of making impact. when people see that at a time like this, they do come back. we have seen that in the past. the focus is keeping people safe and prepared. >> david, jim cramer. curious to know whether your business has been affected by mobile. i get up this morning and i don't go to weather.com because i click the weather icon on my apple iphone and i see what i need to know. are you guys in direct competition with them now because the apple comes stocked basically with that weather icon and it's not yours. >> well, actually, we have three businesses, one of which provides weather data. in that particular case in partnership with yahoo! and
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apple, we do provide the data. it's part of our business. we're the fifth downloaded app of all-time. on the ipad which doesn't have a preloaded app, we're second. only behind ibooks. most people want more information and we continue to have strong properties on mobile even when there's a simple preloaded app. >> what is the relationship? i happen to be with walter isaacson this weekend. to get into apple, is that something you have to give away just to get exposure? >> i think we have a very good relationship with apple wheth. weather is an important part of the mobile experience. it has been from the launch of the smartphone. i'm happy with the partnership the there. we work with android and microsoft. >> you can always tell by the
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tenure of our questions, the kind of things we want to talk about on a day when the market is cl >> on that, of course, understanding safety is paramount. we are curious about your business, david, in the sense of the way people access it. do you get more hits to twitter and online than you do to the tv product? is that simply normal course of business or does it change in terms of the mix during periods like this? >> well, listen, the reason we have all these different ways of reaching people is that people do have different ways they want to reach. mobile is the fastest growing part of our business and all of the studies of smartphones say weather is the number one category on a smartphone close to half of all people with smartphones check weather every day more than any other category, news, sports, finance. so that continues to grow. but people also want the more in-depth coverage of weather.com or weather underground and
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television is important to an audience and on a week like this, we see ratings spike. everyone is watching the weather channel right now. >> we become core weather enthusiast in these periods. >> certainly. >> any challenges specific to sandy? i don't know if you're a meteorologist yourself? is she harder to predict than any other big storms we've seen in the past couple years? >> every storm has its own characteristi characteristics. i'm not a meteorologist. they say this is unprecedented in terms of the convergence of events. what i would say is a full week ago our meteorologists were watching this storm closely. we were first on the air to say there were two paths, a european model and u.s. model. for almost a week we've been saying this was a possibility. i think out there in front. as it became more clear that our data was right and the worst possible scenario was likely to come true, i think we have been out in front of making sure
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people stay prepared and i think our meteorologists just nailed this one. >> luckily for them and for us that we know information. we still have to live through it up here in the northeast. david, thanks for your time. >> thank you. good to be with you. >> what's coming up tonight? >> a fantastic ceo, deborah cafaro. senior housing which is a very, very good area. 3.9% yield. focused on yield on the show. >> all right. we'll see you later on this morning. come back and we'll talk to jim from costco and others. we're not leaving the top story of the day. hurricane sandy forcing closure of the u.s. stock market. we'll tell you what the storm means for business, energy and the economy. plus, michael brown, fema director under hurricane katrina will give us his take on sandy's impact as well when we come back. ♪ ♪
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up the ante. and if you stumble, you get back up. up isn't easy, and we ought to know. we're in the business of up. everyday delta flies a quarter of million people while investing billions improving everything from booking to baggage claim. we're raising the bar on flying and tomorrow we will up it yet again. welcome back to "squawk on the street." hurricane sandy disrupting the east coast and wall street. we're here at cnbc headquarters in new jersey because the new
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york stock exchange and the nasdaq have completely shut down today due to the impending effects of sandy. the worst arriving to lower manhattan in the form of some serious flooding. no word on when trading will resume. duncan was with us in the last hour and says they hope to open by wednesday no matter the damage. 9,000 flights have been canceled due to sandy and new york city can now expect wind gusts of more than 90 miles an hour. that's up from the 60 miles an hour that was previously expected. >> we've got someone who might know a thing or two about what is going on inside fema. michael brown led the federal emergency management agency during hurricane katrina and joins us now from denver. good to have you. >> good morning, everyone. >> people especially officials have learned a lot from hurricane katrina. what is the most critical in terms of mobilizing resources in the early stages of the storm like we're in right now? >> actually the most important thing right now is to get people to take the storm seriously. i heard various reports of governor christie and mayor bloomberg and others talking
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about people evacuating people in manhattan out of the evacuation zone a because i think what we tend to do is right now it's not -- it's bad. it's not very bad. i just finished reading the latest national hurricane center report, and they're estimating a storm surge which is going to come in later this afternoon and this evening anywhere from 6 to 15 feet for new york harbor. if it pushes up the hudson river or up the east river but particularly the hudson, you may see things like the path station at world stray trade center and places become flooded and because it's sea water, it may be down for a while. people need to hunker down and get ready. by the end of the day it could be considerably worse. >> what's the process for escalating the response from the federal government? we have seen it play out state by state over the last few days that they effectively asked the
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president to declare a state of emergency and then in some instances he clearly has. what then happens? is that cash is available or does it put military on notice, how does it work nowadays? >> that's a great question. it really takes the fiscal pressure off state and local governments basically when the president signs a declaration or approves an emergency, it's really saying that feema will step in. focus on getting the national guard in place. focus on first responders. focus on evacuations. do what you need. we'll worry about costs later. that's good for state and local governments but it means the federal treasury will get drawn down to borrow more money to take care of these needs. it's a matter of turning on that fiscal spigot than moving personnel. >> what would be your greatest
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fear if you were fema director right now? >> it's the end of october. hurricanes we're so accustomeded to hurricanes according along the florida and georgia and carolina coast. i think this storm shows right now 85-mile-an-hour sustained winds. it's only moving at 20 miles an hour. you have a cold front moving in in places like virginia, west virginia, pennsylvania, new jersey, you're going to see long sustained winds. you're going to see a lot of flooding. the further north it gets, you'll see incredible snowstorms. this is widespread over a huge geographical area. that's going to shut things down for a while. >> it seems to me that in galveston people treat these things almost like a yawn. we're not used to this in october or july. maybe you do get some people making that move, making that evacuation without having to be told two or three times. >> i think so. then you have the unique
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situation of for example there in manhattan most people don't think about when my elevator goes out and i live in the evacuation zone in zone a on west side highway that i live on the 35th floor, you have no power just to get out means you have to maneuver 35 flights of steps. it's a different environment for this storm to hit and the needs will be different. people will find it very difficult to get around. it's not going to last just in and out in a day. this may last for several days. >> i actually live on west side highway outside of zone a so the type of thing that you're talking about is important for my community in manhattan and given that we now have stronger winds, given that you're now talking about potentially a 15-foot surge in water, that would seem to suggest that michael bloomberg just evacuating zone a for manhattan is insufficient. if the situation had changed, can the mayor evacuate greater proportion of the city or is he
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now locked into what he originally said. hundreds of thousands of people find they should have been evacuated but have not been in manhattan. >> any time anyone issues a mandatory or even a recommended evacuation, you should pay heed to it and do it. i'll give you an kpaexample. a friend worked for one of your competitors and said the front side of her building is evacuation a. the back side is not. what should i do. even if i were four blocks away from evacuation a, i would be moving out any way. that's the kind of things that people need to realize. even though evacuation a area may be well defined, it doesn't mean that areas outside are going to be affected too. when you think about manhattan, it's above sea level but not by much. people need to take it seriously. it's not going to destroy buildings in manhattan but it's going to make it very
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inconvenient, no power, difficult to get groceries and difficult to get around and that's what they need to pay attention to. >> we're so used to in the wake of a storm in the south looking at the blue tarps, the blue fema tarps over roofs. you make the point about manhattan high rises. is fema's role in an urban setting much different. it's got to be. >> fema will respond irrespective of the geography, irrespective of the state, irrespective of the politics. fema responds no matter where it occurs. in fact, when i was the fema director, one thing we put together was our ten worse scenarios. this comes close to it. one of the ten worst was category 3, 4 or 5 going up the hudson river. it's been a hundred years but can you imagine in this day in age a category 4 storm going up the hudson river and shutting down the entire island of manhattan.
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for weeks at a time. i'll give you an example. in florida, when you have so much power go out, they start trying to restore power as quickly as possible. they can only do it block by block, street by street. some places could be without power for days and in florida you had people without power for literally four weeks while they were trying to get it restored. that may not happen in manhattan but if it were a different storm, greater magnitude, you could see that happen there. >> i want to go back to what seems like a very important point and that is that your recommendation to those close by evacuation zones but not in evacuation zones is to leave. >> absolutely. because if, again, looking at the latest hurricane center report which came out at 8:00 a.m. eastern time, they're estimating a storm surge of 6 to 15 feet. you guys are familiar with west side highway just think about a storm surge of 15 feet of water which would be the worst case
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scenario, 15 feet of water moving up the hudson will move farther in than just evacuation area a. it will move across the tip of manhattan. >> michael, always good to get your advice and analysis in these situations. michael brown, former fema director. >> more than 8,900 flights have been canceled. delta air lines is one of the many airlines already feeling the impact. our own phil lebeau is live outside of the delta operations center in atlanta. phil, good morning. what does it look like? >> carl, it looks like it's a matter of hours before delta makes a decision in terms of whether or not they extend the flight cancellations through tomorrow afternoon and into wednesday morning. we'll have more about that in a bit. with when we talk about flight cancellations in the northeast, take a look at all of the hubs, not just for delta but for all of the airlines that are impacted here. you can start in d.c. united and u.s. airways with a hub there. u.s. airways has a hub in
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philadelphia. no flights out of philadelphia today. newark, new jersey, jetblue. delta at jfk and laguardia. american, united. the impact is substantial. here's how the flight cancellations break down. yesterday, 1,300. most affected airport was newark. today the most affected airport is philadelphia with more than 1,200 cancellations. look at the number for tomorrow. this is the most important. 2,500 cancellations as of right now according to flight aware.com. that number is expected to rise depending on what happens with hurricane sandy. now, here at delta they canceled more than 2,000 flights due to the hurricane. they are tentatively planning to resume east coast flights tomorrow afternoon. we say tentative because they want to see how the facilities are functioning. if they are functioning. can they get staff to those airports. is there mass transportation in new york city? and the focus for the airlines when you look at who flies in
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and out the most of the northeast, they want to bring it up gradually. delta has 70% of the flights to the northeast followed there by us airways and united 33% for other airlines. we mentioned the facilities. i talked with the head of operations here. he said they are likely to bring back flights into the d.c. market tomorrow afternoon depending on what happens with sandy but then when you look at new york, they may extend the shutdown through wednesday morning particularly when you look at jfk and laguardia being on waterfront, you could have f facilities flooding. we'll have updated numbers on what delta plans to do within the next couple hours. >> i heard from a ceo of an airline last night that there's a bit of a scramble at lax and san francisco for parking spaces because there are so many hundreds of thousands of aircraft that have been diverted from the usual flights to east
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coast that they have to park them somewhere and they are running out of space. >> simon, they are parked all over the world. they have delta planes parked over in europe right now that would normally be flying back here. a lot of the planes that were usually in new york, they are in hubs in minneapolis, detroit, any place where they can find space, that's where they are putting planes right now. >> thank you very much. still ahead on the program, clearly thousands of flights are being canceled. last-minute hotel rooms being booked. a live and exclusive interview with the largest online travel agency for america, expedia's ceo will join us next. i'm a conservative investor. i invest in what i know. i turned 65 last week. i'm getting married. planning a life. there are risks, sure. but, there's no reward without it. i want to be prepared for the long haul. i see a world bursting with opportunities. india, china, brazil, ishares, small-caps,
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let's get more on the travel impact of sandy. here on the cnbc exclusive, the ceo and president of expedia, which is of course the largest online travel agency in the united states. welcome to the program. clearly you can see what's happening to the travel industry be it hotels or flights in a very different way from the rest of us. what are you able to report from your business at the moment? >> at this point it's all hands on deck. over the weekend we tried to get as many operators into our call centers as we can to make sure that we have as much
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availability as possible because we knew that there would be scheduled trouble, et cetera, going into early in the week right now. what we see is elevated call volumes. double the numbers of calls that we usually do on a monday morning. we're really working with our airline partners and hotel partners to reaccommodate the guests as they need to be reaccommodated with changing travel plans. >> i imagine there are a huge number of people who don't get what they want. >> you know, to some extent there is no winner here, right. there are a limited amount of planes flying right now. people are getting bumped off flights. flights are getting canceled. there are a lot of unhappy customers because of the situation and what we try to do is make it better for them. i will say that the hotel partners, airlines, et cetera, they are doing everything they can to help out the customer. >> talk me through what happens with pricing. i had to get a friend back early to denver from jfk on saturday.
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as i sat waiting to get an answer from united airlines for an hour and a half unsuccessfully, i sat on one of your competitors and prices to denver doubled and tripled. some flights were removed. others, there wasn't an increase in the price at all. are your partners or are you physically intervening saying we have a special situation here. we reduce supply or double the price. what guess oes on behind the sc? >> the price is usually determined by the airline partners. the airlines drive the pricing. a lot of airlines have revenue management programs. they are looking at supply and demand and pricing on a live basis based on whatever their optimizing for. you might see some airline prices going up significantly. you might see some prices staying the same depending on revenue management program of a
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particular airline. >> help us understand how this impacts your business specifically. at the end of the quarter will this be a help to your quarter or will this be a ding to your results? >> i think it will hurt the results. right now what we're worried about is making sure that our customers are okay. we're in this for the long game. a couple of million dollars in a quarter will not throw off the long-term plans. >> is that what it is right now is a couple million dollars? >> i don't have an estimate. what i tell my staff is not worry about it and make sure customers are okay. that's job number one. we'll figure it out. >> you reported toward the end of last week there was a 15% surge on stock price on numbers that you came through with. stock prices doubled during the course of the last year. benchmark upgraded to a buy saying that you have solid execution, strong organic tail winds and aggressive expansion strategy. that's the basis from which we bring you onto the program. let me ask you that said about
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the 6% decline in your revenue per room night and 3% decline in average daily room rates for hotels. is that simply because of price competition from priceline? >> no. it's really a shift of business for us. the fastest growing part of our business right now is international business especially in the age of pacific regions. china is growing quickly for us. as you might imagine, hotel prices in china for the chinese middle class for the local traveler are much, much lower than hotel prices in new york city. as those parts of our business grow faster, you get a makeshift into developing markets where rates are significantly lower than the developed markets. we think that's a good thing. we want to grow units. we want to grow internationally. this quarter actually for the first time we had more room night bookings from international travelers than we had domestic traveler. even though that may hurt unit
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economics, we think that's growth and that's a great thing for us. >> what are you saying to shareholders about the various court cases mounted against you and others in the industry for price fixing not just the office of fair trading in united kingdom but this class action now in california. >> the class actions really started after the oft. we're working with them. in general we think that online travel agencies bring much more choice to customers. we have over 160,000 hotels. 200 airlines. we want to give choice variety to consumers and we'll be working with authorities on this case going forward. >> something we talk often about is movement to mobile devices for so many businesses. we talked to the gentleman that runs the weather company. what about your customer base. is it moving to mobile devices to make reservations and things of that nature? >> very much so. very much so. what we're seeing is a different
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kind of customer coming mobile. that's the last-minute booker. you used to have a situation where you drive into town and if you didn't have a reservation you look for a sign and see what rates are. now consumers look down to their smartphones and looking to book a hotel last minute. what we're also doing is giving hotels special opportunities to reach these last-minute travelers exclusively. mobile only rates. hotel wins because there's a customer right there that night looking to book. and also the customer wins because they get a price break. hotels.com went over 10 million downloads on mobile, hotwire another brand of ours showing more than 20% of their bookings mobile right now. it's a great opportunity. >> what can you tell us about this point for bookings for thanksgiving and christmas. are customers booking now? >> in general we see our trends accelerate.
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what we found and obviously the downturn that we went through just feels like yesterday. what we saw is that consumers still travel. they adjust their pattern. instead of flying, they may drive. instead of a seven-day vacation, they may take a five-day vacation. consumers adjust and also suppliers adjust as well. we have an incredible package deals on expedia.com going down to mexico in order to give consumers that little incentive to book. >> have you seen consumers like the other day we had a restaurant ceo say that he's been noticing consumers come in and not get the coke for instance as a result of pressure on consumer spending. our travelers still booking the package, hotel but minus the rental car, minus the airplane? just two legs of that stool. >> we're seeing a couple things. one is we see length of stays shorten a bit. instead of going seven days, may go six days, right. another thing that we're seeing
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is consumers average daily rights are coming down and for example we are seeing our package business at expedia increase because with packages for example hotels give special rates that aren't available on a stand alone basis. consumers are definitely look g ing for that extra dollar and are being aggressive about it. >> if google becomes an online travel agency and i heard that apple developed an itravel application, how do you respond to that? how do you stay ahead and ensure that your business and others are not commodityized. >> travel is all we do. to the extent that apple and google gets into travel, it's a small part of their business. we invest hundreds of millions in technology. if we can't beat them at what is a part-time game for them, shame on us. we're very, very confident about our prospects going forward.
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>> good to see you. glad you are safe in seattle away from sandy. thank you for joining us. congratulations on results. ceo of expedia. >> will sandy rock the vote? we're live in d.c. with the storm's potential impact on decision 2012. "squawk on the street" is back after this. i'm freaking out man.
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new york governor andrew cuomo beginning his briefing on hurricane sandy. >> the frequency of the exposure assisted us in getting prepared. i think we've done everything that we need to do. and so far as you've heard, the storm is as we predicted. it's going to be a lot of rain and a lot of wind and that is proceeding. the question is the extent of the storm surge. it is already high. it's already at irene levels. the question is going to be what level does the surge take us to later on this afternoon, later this evening when it is actually high tide. and if there's a possible area of concern, that is it. that's what we're monitoring
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closely now. as an added precaution today, we are announcing that we are going to close the holland tunnel and the brooklyn battery tunnel now renamed u.l. carry tunnel at 2:00 today. those tunnels are prone to flood and as a precaution, we are going to be closing those tunnels at 2:00 today. the bridges at this point will remain open. they close at 60-mile-per-hour winds. weather forecast suggests gusts up to 90 miles an hour. people should keep an eye on that. the situation may be updating as we go throughout the day. we will also be calling up an additional 1,000 national guards people. general murphy is in charge of that. we called up 1,000 yesterday. we're going to call up an
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additional 1,000 to make sure we have all of the resources that we need to deal with the surge and any damage from the surge. our current focus as you heard is on the surge and what the surge could mean. we've been working with the coast guard and the army corps of engineer on that. we'll be redeploying all of the naval equipment that we have in the state and local governments have in upstate new york to the downstate area. new york city, long island, et cetera, to be of assistance if we need it. rescue boats, military boats, state police boats, et cetera, will be moved downstate. we're preparing for power outages that we have been discussing. people wonder why we are suggesting that these may be prolonged power outages. after a disaster, hurricane, flood, et cetera, what normally
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happens is crews, utility crews from other states come to the affected area. you have an influx of crews and that helps you do the repairs. here there is so many states potentially the entire eastern seaboard or the northern part who will need assistance there aren't enough crews to call in. you're going to have states basically in competition for scarce resources. we have commitments of about 4,000 utility workers to come into the state at this time. once we know where the damage is actually done, we can also redeploy within the state. in other words, if the power ou downstate, we can bring upstate resources to the assistance of downstate and vice versa. we're preparing for that and addition of the national guard will be helpful with that.
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the federal cooperation has been extraordinary. i want to thank our federal partners. i work in the federal government for eight years at the department of housing an urban development and i was on the other side of the table on the federal side of the table. hud would do just this. would respond in disasters. i had a lot of experience during those eight years. never thought it would come in handy but it wound up coming in handy. i can tell you from that experience, this federal response has been extraordinary. i spoke with the president yesterday. he granted our disaster declaration for a pre-landfall disaster declaration that allows us more flexibility and access to federal funds. we couldn't be asking for anything else from our federal partners. i want to thank them for that. again, as the situation changes, there will be updates during the course of the day. >> governor cuomo outlying how the storm is impacting mass transit and tunnels in the new york area that will close at
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2:00 p.m. bridges remain open until winds reach 60 miles an hour. of course we'll keep you updated as news warrants. residents of the jersey coast bracing for hurricane sandy's arrival. we'll speak with pennsylvania governor tom corbit next. he's, scuba diving the great barrier reef with sharks, or jumping into the market, he goes with people he trusts, which is why he trades with a company that doesn't nickel and dime him with hidden fees. so he can worry about other things, like what the market is doing and being ready, no matter what happens, which isn't rocket science. it's just common sense, from td ameritrade.
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the worst of hurricane sandy arriving to lower manhattan as rising water there begins to flood areas around wall street. the new york stock exchange and nasdaq have shut down due to impending effects of sandy. they are seeing levels like they saw with tropical storm irene 14 months ago. 9,000 flights have been canceled. wind gusts of more than 90 miles an hour expected to hit new york city. customers warned to prepare for long duration outages. >> we want to get you caught up to speed as to what is open for trade. u.s. equities are not trading. futures of course have stopped trading at 9:15 eastern time. we do have the latest update from cme group closing at noon eastern time. trading of commodity products. energy specifically as well as the ag commodities. look at the gasoline futures. we see impact from the hurricane
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on gasoline futures up sharply because so many refineries in the northeast are forced to close. more than two-thirds of east coast refining capacity is shut down as we are bracing for the very worst of this hurricane. let's bring in phil weise to get impact here on some of the companies. fill, what is the overview in terms of the impact and who will feel the impact the most? >> we've had a report from phillips 66 and hess. there are a couple others that are shut off. about 1.3 million barrels a day of capacity for refining in the east coast. you have to think most of that will be impacted by this. what really the big factor is there going to be any damage to these facilities that will keep them shut for more than just the duration of the storm. >> phil, presumably the issue here is not just supply but also demand. if tens of millions of people are going to be without power, that's going to massively reduce
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the demand for many of these commodities. supply may be interrupted but the loss in demand may be greater. this could be negative could it not for some of those trades. >> you're right. people have been told to stay off the roads and stay in their homes so they're not using fuel right now. the only thing i worried about from past situations is on the east coast we had a number of facilities that shut over the past for you years. capacity is down and inventory levels are low. normally the impact is when we have these storms, it's bearish for the commodities. >> when will we bet the best read as to whether or not there's damage and how quickly that can be repaired? how quickly to get a refinery back up and online? >> if they just take it offline and there's no real damage, it shouldn't be a big deal to have it back up and started. the question is if there's flooding and things like that,
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that's where it is more problematic if the refinery has to pump it out and make sure equipment is dry before they can restart. i think that right now certainly there's going to be a loss of income for them for the time that they're shot. they're not going to be producing product. they can't bring any product in either because the ports of closed so it will be how quickly the ports are open. that's another factor that will come into play when they do get restarted. it is certainly a short-term negative for them. it's going to be how long until they're back up and running. >> thanks for phoning in. we appreciate it. >> recapping headlines from governor cuomo's press conference. bridges remain open. they close when wind speed gets to 60 miles an hour.
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we'll keep you updated on any further updates from the state of new york. meantime, pennsylvania has declared a state of emergency on sunday by both the governor and the president. governor tom corbit is with us from the pennsylvania emergency management agency in harrisburg. governor, good morning to you. >> good morning. how are you? >> as well as can be expected i guess. that presser by cuomo was pretty dire. the governor of maryland held a presser saying that people will die as a result of sandy. they just prohibited driving in hoboken this afternoon and tonight. what's it like in pennsylvania? >> we certainly hope that nobody dies from this storm and we are trying to be as prepared as we possibly can. the pennsylvania emergency management agency is working with the counties. most counties have already opened their eoc, emergency operation centers, we have closed all of the state offices in pennsylvania. most of the schools in the southeastern part of the state and south central part of the state has closed. we called up 1,600 national
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guardsman right now we have 16,000 that are available for us if we need them. shelters that we opened about 100 so far. we will have enough shelter capacity for more than 30,000 people and as you know with the order from mayor bloomberg to evacuate certain sections of new york city, i assume that some of those will come either into new jersey or all of the way into pennsylvania and we're working with the penn state university and branch campuses to house some of those people. we have taken some moves in regard to highways. penndot and pennsylvania turnpike commission reduced speed to 35 miles an hour for passenger vehicles. many trucks are prohibited. tandem trucks, empty tractor-trailers, cars pulling trailers are prohibited, motorcycles are prohibited on the southeastern areas of our interstates in southeastern pennsylvania. >> if i'm in your position, i
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guess obviously first things first. there's going to be wind and rain. to what degree is the snow going to be complicating factor during what would normally be a recovery period? >> the snow that we see will be in western pennsylvania in higher elevations. how that complicates it is people from western pennsylvania who come over to the central or eastern part first responders to help out are going to have to stay back and work in that area. with the track of the storm, it changes hour by hour. we're not sure what the snow requirements will be in western pennsylvania. the most important thing is the wind right now. that's going to take down a lot of power lines. we know that. we have been working very closely between the pennsylvania utility commission and the electric companies to get vehicles and repair crews in from western states, central states.
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this is not like a thunderstorm where they go down and they're down for an hour or two. they'll be down for a while because these winds right now are already 40-mile-an-hour winds in southeastern pennsylvania. they're going to cover a good portion of southeastern and central pennsylvania. it's going to take a while to get it back up. >> we have an election on tuesday. this is a huge wild card, isn't it, being thrown into that process on the basis of which side can get the vote out in which areas. this could have huge consequences for the results of that election, couldn't it, given how close it is in some very important states. >> it's very close in pennsylvania in my opinion. the secretary of state, secretary of the commonwealth is already in contact with the various counties. if a county is closing their county courthouse and a couple have for today, that's going to delay by whatever number of days they're closed the applications
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for absentee ballots and time they can get those back in. we open that by next tuesday we should have all power back up. many, if not all of our voting machines have emergency backup batteries so we're pretty good about next tuesday. right now it's more the absentee ballot. >> governor, thank you so much for your time. i know you have a lot to do. good information there. gove >> estimate of damage and cleanup coming into the event where that could rise by the second. what impact could that have on a weak economy. that's next on cnbc.
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>> let's get more on the impact of sandy on new jersey a area. al roker is live at point pleasant, new jersey. al, it's looking pretty rough out there. >> melissa, we are -- normally on a good day past these dunes, excuse me, you'd have about 150 feet of beach. that's not the case as you can see. the beach is is gone. so these tudunes, the only thin between atlantic ocean and point pleasant beach, new jersey. we have the latest in from the national hurricane center. right now hurricane sandy is 205 miles southeast of atlantic city. it's 260 miles south-southeast of new york city. it has intensified. the winds are now at 90 miles per hour. and it's moving north-northwest at 18 miles per hour. at that rate, the storm now has started to make the left turn
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toward the coast, myself likely mid-jersey shore. and then any place north of that will be in the roughest part of the storm. the northeastern quadrant. that means northern coastal new jersey, parts of new york harbor, south facing beaches of long island, of course, the long island sound, which includes coastal connecticut, rhode island. and we're looking later on for coastal massachusetts to get involved. storm surge is going to be a big problem. later tonight, about -- we're talking anywhere from 5 to 11 feet above normal. right now we're getting a solid 35 mile per hour wind. and those winds will be pushing and piling the water up along the beaches. so that's going to be a problem. we have an astronomical high tide part of this. rainfall has also been a big problem. anywhere from 5 to 7 inches of
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rain. if that's not a big enough problem the winds will bring down trees. powerlines will go down. estimates of 10 million people without power by the time this is over, melissa. and we've got blizzard warnings in parts of west virginia and western virginia, one to two feet of snow. sandy is going to be one for the record books, melissa. >> certainly is. al, thank you. al roker from point pleasant, new jersey. our special coverage of hurricane sandy and your money continues after a break. and an update from con edison. the company that provides electric service to new york city and most of westchester county.
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this is just coming in regarding the economic releases we're expecting later on this week. the labor department is saying no decision has been made yet on delaying friday's job report. the labor department will assess the data releases when the weather emergency is over. meantime the census bureau is also saying there is no decision yet on delaying its releases later this week, the construction report on thursday and factory orders on friday. so this is something we are closely monitoring. again, no decision yet on
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whether or not the jobs report on friday, the last one ahead of the presidential election, will be delayed. >> wow. that, again, could affect the election. meantime, ceos are delaying the release of their quarterly results. that's a major factor at the moment. you'll be aware we've had forced evacuations and financial markets that have closed as a result of sandy barreling across the east coast. senior economics reporter steve liesman joins us with that part of the story. steve? >> simon, every disaster is unique. the real cost can't be known until after it's clear. how this storm's fury unfurls in the nation's densest population center. there's a pattern for how to think of the possible economic cost. before we get a small surge in activity in preparation. the activity then remains depressed. then you have a bounce back as part of the cleanup that is dependent upon the amount of damage that's out there. this case what's unique is the widespread impact area, the heavily populated impact area,
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and what looks to be a relatively long lasting storm. i was interested in what governor cuomo said about the inability to get crews that could bring electricity back on. hurricane katrina shows up in the national economic data. look here at the jobs effect where payroll growth in the two months september, october slowed in the month of and after the storm hit. then you see it bounced back. here's the problem. the unique aspect of this storm hits an economy that doesn't really have 100,000 jobs to give up,li up, modeling the same effect of ka trtrin katrina. places to look for effects on the other side are in the construction industry which has been hard hit by the housing collapse. could see a bounce back. of course, there's the retail side with concentration on home repair. one word of caution. in the u.s. we calculate quarterly change at an annual rate. downside and upside effects are multiplied by four. that's going to exaggerate what you see here. here are the biggest storms we've had or biggest national
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disasters. katrina at the top of the list by a very long way. throughouts a droughts and heat waves, hurricane andrew and the midwest flood. at this point we don't know where the storm is going to rank in that list. there's widespread hope that this storm does not end up ranking anywhere on that list. when we come back, we'll talk about the next natural disaster, this one is not a benchmark. >> of course, the hope, katrina worst natural disaster in the history of this country. its impact on the world is still being felt to this very day. let's hope this is nothing like that. >> most times things bounce back. employment levels bounce back. when you have the destruction you had in katrina, it did not bounce back. i will offer one thing which is not a pleasant thought at this moment. new york's been undersiege as a financial center for a while from other parts of the country and other parts of the world. so the question is whether or not this ends up hurting new york in a longer lasting way as a financial center. >> okay. steve, we will watch with huge
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welcome back to "squawk on the street." jim cramer joins me here onset at cnbc headquarters in new jersey. the new york stock exchange and nasdaq completely shutting down today due to impending effects of hurricane sandy. waves slamming against lower manhattan now. moments ago the governor of new york, andrew cuomo announcing the brooklyn battery and holland tunnel will close at 2:00 p.m. today. other bridges remain open so far. that could change as wind gusts are expected to reach 90 miles an hour. the storm already causing flooding in lower manhattan.
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we're tracking the storm from all angles. we'll start with scott cohn live in battery park in lower manhattan. >> reporter: carl, a couple hours ago as you might recall i was ankle deep in water. that was high tide here at the battery in lower manhattan. the tide has gone down somewhat. i'm somewhat high and dry. the water is still relatively high. this is what everyone was concerned about. as those pictures got out in the last couple hours we saw some tourists make their way over here. they were quickly sh lly shooed the area by new york police who's letting us in the media take our chances here but doesn't want anything else to go on. here it is, what is supposed to be a busy monday in manhattan's financial district. but take a look at the new york stock exchange a short time ago. they have sandbags out. the stock exchange, as you've been reporting, is closed. both electronically and physically. and that is not in the flood prone area. the so-called zone "a" that is
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the evacuation area. in contrast, the new york mercantile exchange is. it is right on the river basically in battery park city not far from here. water was coming over the floodwalls earlier. you can see why the nymex did, indeed, close for the day. let's go through again the updated list of closings now in the new york city area. as carl said a moment ago, the holland and brooklyn battery tunnels will close at 2:00 new york time. the bridges are open, but they are monitoring them. there's been some speed restrictions already on some bridges in the area. portions of the fdr drive which runs along the east side of the manhattan have also had to close due to flooding. you can see why the financial markets have closed. because just the hint of this storm and the tidal surge which is not the storm surge yet has already caused some problems. and they know it is going to get worse as this day progresses. back to you. >> yeah, scott. as your live shot changed i thought for a moment you hadmov.
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you're saying the water itself has receded for now? >> reporter: that's right. it was the tide. as we said before, that was -- that was -- so you have high tide and you also have the full moon. so astronomical high tide as the meteorologists say. and as i said a couple hours ago, when the storm hits and you have storm surge on top of that, there's no way i'd be able to be standing where i am right now. >> scott, we'll come back to you in a little bit. scott cohn, thanks so much. jim, it's going to be an interesting exercise to figure out in terms of retailers or what have you, who's drawing them in ahead of when things really do get bad out there. >> maybe anecdotal. you and i tweet a lot. i just tweeted you and i are working together. @jimcramer i polled people. it's costco. >> we'll hear from jim sinegal in a bit. >> target, home depot, walmart. the places that sell sporting good stores. very good indication.
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batteries, coleman. a lot of coleman products, that's all jarden. it's the things you can't really make money off of. can you make money off waters, no. batteries, procter & gamble too big. pet food kind of interesting. there's pet food plays. but colgate reported a quarter that wasn't that great last week. they would probably dispute that. that was reaction on the street. again, that would be a spur. dollar stores. 47 million people are on food stamps and the dollar stores move aggressively into that. single servings. doesn't matter. >> this is intelligence you derived from twitter. sample size is pretty good. >> got a decent sample. i will say that people are for the most part fed up already. it was i saw long lines at costco. i couldn't take it. my whole foods closed at 5:00. my supermarket was too jammed. now, that is a sign that weather -- as weather corporation told us the advance planning on this one is extraordinary. people just really did stock up.
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>> that's good. we'll talk to sinegal and get more color. meantime meteorologist todd gross is tacking the storm at cnbc headquarters. what's the very latest? >> i was fascinated by watching scott. i remember in the perfect storm in 1991 only one day later than today how the tide started to drop. just like it's happening now. same time of day. again, it was on the 30th. it built back so quickly in the afternoon you couldn't believe it. that's what's going to happen again. we have the storm center right here and the circulation around the storm is counterclockwise. that's normal. that's not the big deal. the big deal is that the storm is moving backwards. it's boomerranging back toward the coastline from east to west. basically from southeast to northwest. it's kind of a double whammy effect. you have the winds pushing the water right towards the new york coastline. of course, long island into the long island sound, new jersey shoreline down to the delmarva.
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at the same time you have the motion of the storm pushing the high waves into the coastline. let's look at some of the surf away.y even though the storm is you can see that the water is coming right into the area, this is cape may. again, right over as of high tide this morning into the streets. and the storm's nowhere near. high tide is 8:00 to 9:00 tonight. and that's going to be the worst from this storm. we're going to really hear from that storm then. until that time, it's a slow ramp up process. but early this evening, that's when everything, of course, is going to break loose. we'll keep you posted throughout the day as this unfolds. >> todd, thanks so much. don't go too far away. todd gross joining us from headquarters here. sandy closing the stock market for today, possibly torl. the first time since hurricane gloria 27 years ago markets have closed due to weather. >> quite a little bit of drama yesterday as they wanted to get the markets opened today. at least electronically.
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and it didn't really work out. the nyse initially decided to close the nyse trading floor but keep trading electronically. nyse ceo told us that decision was reversed after talking to other market participants. >> i think it became clear to us fairly quickly after making that decision that there was an overwhelming consensus from the majority of participants that they would prefer that the markets be closed entirely as, you know, you hinted at the stability and volatility issues. but the key point from our point of view was electronic or not, the firms are all going to have to staff themselves and, therefore, endanger their people. >> as for tomorrow, a decision on whether the exchanges will open will be made in the early afternoon. that's today. but i think you can assume the exchanges will also be closed tomorrow. the focus is on wednesday. >> i think it is really, really, really important for the industry that we find a way to get open on wednesday.
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given everything you just said. it's month end. it's options expiration. i mean, there's no -- there's no doubt that we need to figure out a way to get open on wednesday. almost regardless of what the damage is. >> month end is very important because many mutual funds report month end net asset values. and many firms report to their clients on a month end basis. the hope for wednesday is that even if the subways are not open, a skeletal group might be assembled to open the nyse floor and all other trading venues even if it is a shortened trading day. obviously they've got to get open on wednesday. maybe they'll go to the electronic trading if we can't open the floor. obviously having the skeletal floor crew open even on shortened hours is what we're working on now. >> we're now once in 100 years. now twice in 100 years. obviously this one a little worse. do you think this would be the same next year? do you think these guys would all -- next 365 days decide we're done with this? we're going to have something?
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>> you mean by all electronic trading? what are you talking about? >> look, they were obviously not ready, okay? no one ever thought this storm would be that possible. we're beginning to realize, you know what? storms seem to be not one never 100 years. maybe we develop an exchange in cincinnati that we have -- obviously we have -- >> once in 100 year events are now occurring every few years. >> yes. >> that's certainly the case. what i think it highlights today is that electronic trading or not, it's still very human oriented. the reason they didn't open is because the human beings, there weren't enough human beings to staff and enough to trade. so you can talk about electronic trading. but it's not robot trading. >> the point's been made all over the place this morning that when a storm hits a corner of one country, it affects stock trading for people who trade this market all around the world. that's weird. that's strange. >> you could turn it around and say nyse, new york, is still the center of the financial trading universe. you could turn that up sooid down. >> one thing to point out. we have big news from here. people have been saying to me you just put everybody at risk. we have a lot of preparations
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here to be able to -- you talk about this weekend. i was at the eagles game with you. a whole nother different kind of a disaster. and we were in constant contact. we're not -- we're doing our best not to put people at risk here. >> thanks for bringing -- >> we have a great preparation plan here at cnbc. >> air mattresses. >> it is high-tech. thanks so much. busy day. want to get an update from con edison this morning. the company provides electric service to new york city, most of westchester county. on the cnbc newsline is alphonso quiroz. some of the statistics we're looking at for most of the east coast, granted, are pretty astounding. 10 million people potentially without power. does that make sense? is there anything in at least your memory to compare this to? >> it certainly is a possibility. we are really watching this storm very, very closely. and we're really concerned, especially the low lying areas in brooklyn and in queens.
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but especially in lower manhattan where wall street is located. we're really taking a very close look at how high the water comes. and we're watching it very, very closely. >> is there an over/under in terms of storm surge that -- that dictates whether or not you go into full crisis mode versus crisis mode light? >> i don't know if we would refer to it as that. but we, number one, have about 700 external contractors, mutual aid crews. 14,000 employees who are really working around the clock right now. so we're all hands on deck at this point. but what we do is that we have what's called storm riders. they are either a camera or a person who's watching how high the levels of the flooding gets in parts of lower manhattan, say, for example. and if the water gets to a certain level, we will shut down some equipment down there preemptively because it makes it easier to restore once the water is gone. if, for example, we let it go, it would just burn out and then it would be much longer to
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restore. >> alfonso, jim cramer. how are you? >> doing well. how about yourself? >> fine, thank you. all weekend i happened to be on interstate 80, interstate 78. i saw huge convoys of trucks coming from southern areas, obviously, where it looks like they might be spared. what do you do with those people? it may not be con ed. but what's the protocol? because they're not union. they're not part of the grid. what do you use them for? >> well, we oftentimes have mutual aid crews come in to help us out as are many other states in this area. lots of time we are mutual aid crews to areas in other parts of the country that may need help. what mutual aid is basically that utility crews will come in. we'll stage them at a location. and once the storm is over, or once it's -- it's starting to end, we will send our crews out along with the mutual aid crews to help make restorations. so those folks will help us in either removing tree debris or making the connections for overhead wires or they'll be going into our facilities
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underground to help restore customers. >> alfonso, con ed has moved aggressively perhaps more than anyone else in the country into natural gas. are pipelines at risk here from this kind of storm? >> well, everything's at risk at this point. you have to remember that all of this utility and all of our infrastructure is underground. water getting involved in any of this, whether it's electric, steam or gas could be a very deadly combination. >> they always say if it's not the wind, it's the rain. certainly in your case con ed is not immune even though a lot of this stuff is not on a pole somewhere. alfonso quiroz from con ed. hurricane sandy. the latest details. plus co-founder and coo of costco jim sinegal is with us to talk about the election just a week from tomorrow. "squawk on the street" comes back in a moment. scottrade, we believe the more you know, the better you trade.
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refineries up and down the east coast are in hurricane sandy's path? how will the storm affect energy prices down the road? mary thompson is live at the port of baltimore with more. good morning. >> reporter: good morning to you, carl. you know, there's already an impact being felt. the port of baltimore is the 11th largest in the u.s. it's a couple miles east of here. it's not a big entry point for crude oil. but the two other ports along the east coast, both new york as well as the port of delaware, have both shut down. all three of these ports not
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accepting any new cargo. of course, for refiners up and down the east coast, that means no new crude to refine. that's important. east coast refineries account for about 6.6% of the country's total capacity. as a result of the storm a number of them are taking steps and either shutting down or reducing operations. phillips 66, lyndon, new jersey shutting down. hess's in port reading. other retduced capacities inclue the facilities owned by pbf and big philadelphia energy solutions facility in philadelphia. delta's facility which makes jet fuel, they gave a comment last night saying they are operating as normal. of course, they are monitoring the storm. all of this has had an impact on gasoline prices, ticking higher in electronic trading. keep in mind even as you take capacity out of the system as these refiners reduce their run rates or shut down, on the other side you're seeing a drop in demand. and andy lipow of lipow and
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associates estimates the region affected by hurricane sandy accounts for about 2 million barrels a day of demand. as people stay home, they're not driving their cars, that decreased demand is going to offset the decrease in production. of course, the concern remains that the heavy rains we're starting to see here in maryland and up and down the east coast will cause flooding and, of course, the associated winds causing power outages. if that impacts the refineries it could take them longer to get back online operating at full capacity. of course, that means production could be impacted for a longer period of time. here in maryland, of course, they are bracing for severe flooding. the governor, governor o'malley, saying flooding could be as bad as it was in hurricane gloria back in 1985. carl, back to you. >> we keep hearing that year more and more today. that's not a good thing. mary, thank you so much. mary thompson. jim, hurricanes are never good for refineries. worst in the gulf coast. but it's no picnic when it comes to the northeast. >> rather remarkable.
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this shows you the poor infrastructure of our nation. we have a glut of refined gasoline. oil, gasoline, being exported. rather dramatic amount when it comes to new orleans, right to mexico. the reason for that is we have a law that prohibits our ships from moving -- other people's ships. the jones act. the other thing is, we have a gigantic amount of refining capacity in the midwest and don't have the pipes to get it to the east. their gasoline will probably go down. probably go down even more. our infrastructure is set up from before we were any good at producing energy. >> or distributing energy. >> yeah. we didn't think we had it. still ahead this morning, co-founder and former ceo of costco jim sinegal is with us live. the election effect on this storm. effect from retailerretailers. how do you go about establishing a logistical plan? a lot more "squawk on the street" in just a minute. oh, hey mike. what are you up to?
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shot of lower manhattan there. rush to buy emergency supplies in advance of hurricane sandy has resulted in big sales days for retailers. costco in bridgewater, new jersey, rang up 900 grand in sales on friday alone. a number usually only reached the day before christmas. jim sinegal is former ceo of costco. i wish the circumstances were a little different for the sake of folks on the east coast. how are you? >> good morn ing. >> i jock edjoked with you peop actually say i wonder if i bought enough at costco this weekend? can we tell already what at least the weekend looked like as the east coast got ready for this? >> well, as you might imagine, there was a lot of purchasing. people buying a lot of food, a lot of energy type pplies. flashlights and batteries and those types of products on an ongoing basis.
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we experienced that throughout the weekend on the east coast. >> jim, jim cramer. how have you been? >> just fine, jim, how are you? >> oh, good. good to see you. costco is legendary for being able to have exactly what you want. once you've run out, what do you have to make it so that your stores are replenished? you've got a terrific store up in harlem. that store runs out, how do you get stuff to it or do you just say, listen, the cupboards are bare and we're done? >> we've got a pretty sophisticated system of distribution, jim. so that system can get goods into all of our locations on a very fast turnaround. we would expect that we'll be able to recover pretty easily. we recognize and have been preparing ever since we heard about this storm. so we're making the provisions to make sure that we've got enough merchandise. >> jim, we covered -- to some degree we covered how you move goods around the country in the documentary we did with you earlier in the year. is this a science, though, when
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it comes to natural disasters? or is it more of an art? none of these storms are built quite exactly the same. >> well, as you know, i think that there are no models for what this type of storm is going to be. so we're in the same position. but obviously ever since we heard about it, we began preparing. so we'll get the goods in. assuming that we can get them into the various depots and distribution points that we need. and we expect that we can. so we've built up a little bit there. and we'll be providing goods. and i think we'll come through this okay. >> so you do stock the depots up a little heavier in advance? >> yes, we did. >> and then jim made the point a couple minutes ago, a lot of the things that people are looking for, the waters, some -- at least, batteries, maybe not. they're not generally margin leaders, right, jim? rad are they? >> did you say margin leaders? >> margin leaders where profit is fattest. >> if you sell enough of it, we work on dollars.
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we don't work on percentages. so the -- our attitude is if we're going to sell a lot more goods, it's going to generate more gross margin dollars. >> jim, i know you're deeply involved in the presidential election which is upcoming. clearly for president obama. you've certainly declared. i wanted to know is this the kind of october and november now surprise that can benefit a sitting president more than a candidate? >> well, who knows. i mean, you know, there's been -- i've heard it argued both ways, jim. that, you know, the people who are lower income are going to have more difficulty getting to the polls. other people have indicated that -- that it will favor the sitting president. certainly i hope that's the case. but i can't predict that. >> jim, i wonder, though, we're getting some fresh polling out of ohio where the president once not long ago, jim, had a five-point lead. it looks very even right now. people still discussing a participation gap, an enthusiasm
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gap versus his first election in 2008. how do you -- how worried are you about that? >> well, obviously concerned. i would expect that in michigan and ohio where the car industry has been reenergized, that that would have a significant impact. we certainly notice that our business in those two states is pretty good. so that was a help for us relative to the economy. >> jim, are there some things that you wouldn't expect that people stock up on? kind of an end of the world trade? or alternatively, i know that at various costcos you could have liquor. are people just -- are there people who say, okay, look. h is it for me. i am going to do as if it is the last? >> i think probably when they're there and they're getting the water and they're getting the batteries, they run across other th and figure, well, i might as well get some of this ham and perhaps some of this frozen food and the potatoes. so it adds up to a lot of different things that add
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probably in many different instances on an impulse basis. >> jim i know you well enough if we walked into a costco right now and i asked you which shelf would be empty, down to the sku you could probably tell me. right? >> i think so, yes. i think it's going to be the usual suspects. i think that you're going to find that the water is going to go down very rapidly. i think you'll probably find some basic issues like toilet paper and paper towels will also go down very rapidly. and, of course, the batteries that we talked about. the batteries and the flashlights and those types of provisionary things. emergency provisions would probably be the same. >> it's going to be fascinating to gauge the effect on the costcos of the world, the retailers, the election next week. jim, we thank you so much for your time. we'll see you next time. >> thank you very much, carl. good-bye, jim. >> jim sinegal joining us from seattle. you see the president is going to make a statement on hurricane sandy at 12:45 eastern. >> i got lucky, carl. i do my costco quarterly shop.
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>> quarterly? >> i do it quarterly. where i just go -- this -- you get the vehicle that has got some room. you know what? i just went for all those things. i have a stack of waters that is this high. so costco is my place to get stuff. it looks like it is again. >> we'll see how it opens later in the week if we get there. meantime we are tracking hurricane sandy as it bears town on the east coast. we'll get you the latest on the path, which areas will be hit hardest when we come right back.
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wall street bracing for hurricane sanidy to barrel through the heart of the country's financial center. lower manhattan experiencing some flooding during high tide this morning. and then just moments ago, the governor of new york, andrew cuomo, announcing tunnels will close at 2:00 p.m. today. bridges will remain open for now. that could change as wind gusts are now expected to reach 90 miles an hour. we are learning that bond markets are going to be closed tomorrow as well at the request of sifma. we'll keep you updated on that. in all likelihood, given the current forecast, the stock exchange will close tomorrow, too. >> it's remarkable, carl. it's remarkable because there was another time i think where there was a macho factor where people would say, you know what? this is what we're going to do.
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we're going to come to work. we learned from katrina that money ain't that important. i think it's a terrific thing for the country that there's no longer this, you know what? we're going to man up or woman up. >> or steal some shares. >> we're going to common sense up. i congratulate this people for being forward enough in saying we're not going to take a chance. don't worry about it. stay at home. it's a terrific thing that's occurred here. >> given that, let's get the latest on sandy's projected path. mike bettes live at the weather channel tracking the storm. mike, talk to us. >> all right. let's talk about it. i think very good reason they'll be closed tomorrow. we've got an epic storm in the making right now. 90 mile per hour sustained winds right now and a pressure that's dropped. it has taken that westerly turn. north-northwest movement at 18 miles per hour. we're expecting a landfall later on this evening, likely to be right along the jersey shore. there's a look at the projected path. by this evening right off the jersey shore. that could be atlantic city. then moving inland overnight, could be near baltimore tomorrow morning with 70 mile per hour
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winds. then taking a turn through pennsylvania. back up through upstate new york. a huge, prolific wind maker. we think it sticks around for several days once it makes that landfall. obviously when you've got that big of a wind machine, you've got likely power outages. areas in red from maine through western north carolina they're already reporting power outages this morning. then possible power outages across the great lakes all the way back to chicago. this is a huge wind and wave maker. look at virginia beach right now. gusting to 34. winds right now at buoys are at 45 and 22 foot waves. 31 foot waves closer to the center of circulation. look at some of these numbers. very impressive. winds coming out of the northeast at 47. gusts to 38 at bridgeport. 40 at newport. we've had gusts as high as 66, by the way, at boston. right now at 49. the waves are 26 to 12 feet. it's going to be a huge water rise event for us in places like ocean city up through all of new
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jersey. we believe already the entire jersey shore has been inundated with water. it's going to get only worse before it gets better. >> mike bettes at the weather channel. new york city major mike bloomberg beginning his briefing. let's begin. >> senator is reporting for duty let the record show. good morning. we're joined today by senator charles schumer and council speaker christine quinn and our key city commissioners. i wanted to once again think linda kalice for her signing. let me begin today by updating everybody on current weather conditions and what we can expect from hurricane sandy over the next two days. we continue to remain in touch with governor cuomo and state officials in coordinating our response to this storm. i'm also announcing right now that we avoided city public schools to remain closed tomorrow. there's no chance the mass transit will be back in time to serve people and they're always worried about cleanup even though the storm should abate
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dramatically as we get into tuesday. the current track provided by the national hurricane center shows sandy making landfall just south of atlantic city this evening. and that keeps new york city well within the danger zone of the storm. and it's why as of now we are under a coastal flood warning from now through 3:00 p.m. on tuesday. and a high wind warning through 6:00 p.m. tomorrow. this is a massive storm. hurricane force winds extend some 175 miles in every direction of the center. the storm may strengthen as it meets the cold front approaching from the northwest. and that's when it changes from a tropical storm to a northeaster which has very big implications for those areas to the west of us and to the north of us. as we've emphasized all along, the greatest danger posed by sandy is the coastal storm surge it will produce. we've already had as much flooding, for example, along the
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fdr which is fundamentally closed at the moment as we did in hurricane irene. now, when we close a road, we close it when the water comes up and if the water recedes, for example, as you go from high tide to a low tide period, we would reopen that. but at any moment, any of these roads, if it becomes unsafe, we close it. and we have lots of people watching. the flooding that could occur later today is why we ordered our evacuation from zone "a" areas yesterday. last night there was a high tide. tonight there's a much bigger one. tomorrow another one. one of the levels along our coast and in our waterways have begun rising and are expected to remain at higher than normal levels for the next 24 hours. the surge will be roughly at 8:00 tonight, 8:15, plus or minus a couple of hours. but remember if you're in the south bronx, the surge you're getting is surge that enters long island sound from out around montauk. and it takes about four hours to
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get down here. so the surge that you would experience there is much later than the surge that you'd experience if the water is coming up the east river and the hudson river. there has been some flooding already in the bowery as well as the fdr and some of the rockaways. we expect surge levels of 6 to 11 feet. a surge of 9 to 10 feet is possible along coney island and the rockaways. and a surge of 11 to 12 feet may occur at the battery monday evening. maximum surge impact in these areas is expected to be at some period plus or minus two hours around 8:15. say 6:00 to 10:30. the peak surge will hit areas along long island sound between 10:00 and 2:00 a.m. as i said, four hours later. if now, if you live on a coastline you have to add to that breaking waves. waves of 15 to 20 feet along the ocean facing shoreline will result in severe beach erosion. but also it drives some water
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right over the roads and inland more. because of the heavy rains, we do expect will come in later tonight, after the first we'll see higher winds. then we'll see the surge. then we'll see more rain. tomorrow morning we expect to be very wet. a high wind warning is now in effect. the heaviest winds will occur this afternoon and this evening. sustained winds of 40 to 55 mimes an hour with gusts of 70 to 80 are what's forecast at the moment. and motorists should experience extreme caution. we will monitor conditions on the bridges. governor cuomo has announced that at 2:00 p.m. today the hugh carrie brooklyn battery tunnel and holland tunnel will be closed to traffic. the bronx river parkway and westbound lanes of the gutles bridge will have been closed and more bridge and tunnel closings throughout the city are very possible. it's -- i'm having a mental block.
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gothels bridge. yesterday i ordered an ev evacuation of residents and businesses in the area designated as zone "a" in our coastal flood plan. let me reiterate for everybody's safety. it's also for the safety of the first responders who might have to rescue people who remain in zone "a" and whose own lives could be put at risk because of that. if you are still in zone "a" and can find a way to leave, leave immediately. conditions are deteriorating very rapidly and the window for you getting out safely is closing. as the winds start building this afternoon, it gets more and more dangerous to go outside. and so you're sort of caught between a rock and a hard place. you should have left, but it's also getting to be too late to leave. if you really experience an emergency, 911, we will send our first responders in although we'd love very much not to have to put their lives at risk. and you can control that by getting out now. you can look outside and say, oh, this is not bad.
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that's correct. but it is going to be. the forecasts are reasonably accurate this close to when we're predicting something. and it's going to be very high winds, going to be a lot of road closures, you know mass transit's not working. and driving when you have big gusts like that is dangerous. overnight city ems crews transported 13 homebound elderly from zone "a" residences. plans were also put in effect to transport residents of city homeless shelters in zone "a" and an increased effort is being made to reach homeless on the streets with the focus on those in zone "a." manhattan veterans afathers hospital and new york downtown hospital have been fully evacuated incidentally. some 45,000 of the 375,000 new yorkers who live in zone "a" are residents of city public housing developments. we continue to make enormous efforts to reach them with the message that they need to leave for their own safety. if you are in one of these 26 affected developments, the city is running buses for the next
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hour or so. but that's going to stop because it just becomes too dangerous to run the buses. if you are still in public housing development, you should go downstairs. the buses are in the same locations they were yesterday. we've placed flyers on all 26 of the affected developments starting last friday. we had meetings with residents last saturday. we started knocking on doors of residents in the affected developments friday and saturday. and that continued yesterday. and we've knocked on every door in the affected developments. we've made phone calls to apartments in every development. if we couldn't reach people, we put fliers under their doors. sunday police officers were at the developments telling people through loud speakers to evacuate. we provided school buses to transport people to shelters. and that is still going on. we're especially going to residents we know are on respirators or other life saving equipment dependent on electricity and telling them to leave and helping them to do so. i do want to commend the elected officials who worked this
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weekend in going door to door with the message to evacuate and particularly to john raya and all his staff at nitra. i don't think anybody could have done more to give people notice and advice how to protect themselves. we stressed all along for people living in zone "a" the first option should be finding a safe place to stay with relative or friends. however, we have also opened 76 emergency shelters in city public schools for those who did not have that option. they are still -- >> that is yor mayor mike bloomberg. the headline essentially that he is closing new york city schools for the second day saying there is, quote, no chance that mass transit will be ready to get people to and from work or school around the city. saying the fdr highway is fundamentally closed in his words. looks like the storm surge according to the mayor will hit at least in the new york city area around -- starting around 8:00 or 8:15 p.m. tonight. he's looking for storm surge between 6:00 and 11:00 p.m. jim, obviously we're not a local
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channel. our news goes around all of the country and around the world. but this is turning into a storm that new york city for most intents and purposes is going to own. we are in the worst spot. >> this reminds me of the 1992 hurricane andrew. i'm not going to minimize what could happen. health, loss of life. but that was worse in some ways than katrina was the gdp event. because katrina kind of localized. it was a gross domestic product event in that there was so much rebuilding that had to be done that there were just months and months and months of lumber going up, shingle going up, roof tile going up, appliance going up. from what you hear with 60 million people, this could be a gdp event. i know the futures are down. look, there's terrible tragedy coming if everybody's right. but there will be insurance that pays off billions. and that will go back into the u.s. economy. i'm not looking for silver lining when there is the lethality of the storm. be aware, they weren't looking for it either in andrew. then it was just months and
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months of better gdp. >> that's an excellent point. joining us this morning, former new york governor george pataki joining us on the cnbc newsline. good to have you. good morning. >> nice being on with you. >> i assume you heard part of the mayor's presser. normally when you're about eight, nine hours ahead of landfall, you get a little more clarity here. none of this is good. >> none of it is good. this looks like a major, major event. i agree with the mayor. he's being proactive in shutting things down ahead of time. that's what you have to do. i was listening earlier and the nypd has redeployed assets, moved some out of the city and some to places where they can be utilized very quickly. that's what you have to do when you're anticipating a major potential disaster like this. >> obviously mta only a couple times in their history have they closed for weather. stock exchange, same story. it's been 20-some-odd years. if you were governor today, would you at this point start to consider more dire scenarios whether it involves loss of
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power or the time with which -- in which people are without power? >> absolutely. you have to consider that now. you have to anticipate that there will be hundreds of thousands if not millions without power. their transportation will be paralyzed for days to come. now, we certainly hope none of that comes to pass. but you have to be ready and prepared and have assets predeployed so that you can work immediately to try to restore power to make sure that emergency services, particularly health and human safety, are taken care of. so i'm sure that's all being done. you certainly anticipate the worst case scenario and do everything you can to prepare for it. >> governor, jim cramer. haven't spoken to you since the kudlow and cramer days. good to talk to you, sir. >> good talking to you, jim. >> governor, was there a plan when you were governor to be able to deal with long island in the way that 1935 there was a terrible, terrible storm in florida that literally had the keys under water. the whole -- you had marathon
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under water. is there a long island plan out there where you basically say, you know what? the bay and the ocean could meet. and this is what we're going to do? >> there certainly are evacuation plans and emergency shelters all set up. and it is anticipated that we're going to have to at some point, maybe not in this storm, probably in this storm, evacuate all the barrier islands from montauk right into brooklyn. that we're going to have to also evacuate the lower lying areas on the south coast of long island. and move in to the higher areas where shelters have been designated. supplies should be in place. and generators in store. but, i mean, there's no ability to evacuate the entire island. the entire plan is to evacuate the coastal parts of long island, which is kind of an oxymoron since it's an entire coast. move to the middle of the island
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where there are predesignated shelters that should be supplied. >> are there people who don't get the word and we're going to have a situation where there'll be rooftops and national guard and helicopters to get these people off ala katrina? >> it's quite possible. i don't think, jim, it's because they didn't get the word. i think the greater risk is people ignoring the word. because they've heard in the past, oh, it's another storm. their house survived the last one. it's kind of exciting. well, this obviously could have the potential to be one of the worst in generations. so people should anticipate that and follow the emergency instructions, evacuate the south coast of long island where they have been ordered to evacuate and follow the emergency services. they're well planned. they know what they're supposed to be doing. just listen to them. that's my greater concern. >> finally, governor, cuomo this morning said even if you're not in zone "a," even if you're close to zone "a" it probably makes sense to start evacuating. for those who are literally going to hunker down and they're
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going to be home for the next 36, 48 hours, is there anything that they potentially are not considering that they should be doing that they're not? >> yeah. i think there's a lot. they figure, oh, i'll just sit inside my house. well, first of all, you have to anticipate no power, no water, no emergency services being able to reach you. and also the fact that your structure may well be very badly damaged itself in the course of this storm. that's why the prudent thing -- not just the prudent thing. the necessary thing is to listen to those experts. and if they tell you you are in an area that should be evacuated, listen to them. follow their advice. >> governor, thanks so much for your time. i know it's a busy day for you. we'll talk to you next time. governor george pataki of new york. >> interesting in listening to the governor. one of the backdrops, 9/11. these agencies learned to coordinate with each other. a terrible event that made it so that all of the emergency responders have a central
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system. it could come in handy in this devastation. >> that's a good point. when we come back, the nation's capital also feeling the effects of sandy. we'll take you there live, tell you which government offices are closed, what landmarks are in the path and whether or not we're actually going to get that jobs number on friday when we come back in a moment. ] how do you trade? with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor, right at your fingertips. [ rodger ] at scottrade, seven dollar trades are just the start. try our easy-to-use scottrader streaming quotes. it's another reason more investors are saying... [ all ] i'm with scottrade. governor of getting it done. you know how to dance... with a deadline. and you...rent from national. because only national lets you choose any car in the aisle...
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hurricane sandy is wreaking havoc in the nation's capital. our hampton pearson is live in washington with the situation on the latest there. >> carl, first of all, the wind and rain have really picked up
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dramatically just in the last half hour. the storm as you might imagine pretty much bringing the washington, d.c., metro area of about 5.5 million people pretty much to a standstill. some highlights, federal and d.c. area government, schools, subways all shut down. metro and bus and rail service which handles about 1.2 million people daily, totally shut down. flights canceled at dulles, reagan national. as far as the museums go, the smithsonian tourist sites are closed. sh shelters there open in anticipation of storm damage later on. power outages sporadic so far. top sustained winds we're told should reach in excess of 85 miles per hour. believe it or not the supreme court was open for business day. we did get some pretty dramatic pictures of president obama in air force one arriving back here. the president back at the white house. we understand he is going to make a statement about hurricane sandy at 12:45 eastern time. over the weekened he did meet,
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of course, with top fema officials promising a big and fast government response. one other casualty here in the d.c. area, maryland and d.c. have early voting. that has been canceled for today. it's up in the air as far as tomorrow. my colleagues who tried to vote over the weekend in some of those areas reported at least two-hour waits for early voting. back to you. >> hampton pearson in washington. coastal regions of the northeast already getting pounded by sandy and the storm is far from landfall. live to the hamptons, check on conditions there after the break. oh...there you go. wooohooo....hahaahahaha! i'm gonna stand up to her! no you're not. i know. you know ronny folks who save hundreds of dollars switching to geico sure are happy. how happy are they jimmy? happier than a witch in a broom factory. get happy. get geico. fifteen minutes could save you fifteen percent or more.
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montauk on the eastern tip of long island, we are basically in a dynamic where the winds have gusted upward of 50 miles an hour. i want to point people out to the ocean because the surf has gotten a lot more intense in just the last half hour or so. high tide was four hours ago. yet we're only about ten feet ls or so. they're very worried about 8:00 tonight when the next high tide comes in. the second thing i want to show you is this building right here. they banked this with sand. and it's a bar and grill during the summer. it's been damaged before. but the concern is with this moon tide it might take it o

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